How Retailers Can Turn Foot Traffic Into Fuel Surcharge Relief
The Iran conflict handed major retailers a problem with no clean answer. Fuel surcharges are up across every carrier, margins are getting squeezed from multiple directions, and the two most obvious responses, raising prices or eating the cost, both come with real consequences. Finance teams are being asked to find solutions that don’t exist in the traditional playbook.
The Iran conflict handed major retailers a problem with no clean answer. Fuel surcharges are up across every carrier, margins are getting squeezed from multiple directions, and the two most obvious responses, raising prices or eating the cost, both come with real consequences. Finance teams are being asked to find solutions that don’t exist in the traditional playbook.
What’s Actually Happening to Retail Margins Right Now
The surcharge pile-up from the Iran conflict has been fast and broad. In less than 60 days, virtually every major carrier has moved:
Amazon: Starting April 17, Amazon began charging third-party sellers a 3.5% fuel and logistics surcharge on all U.S. fulfillment orders. According to Retail Dive, the increase averages 7 cents per unit. Amazon has been notably vague about when (or whether) it goes away.
UPS and FedEx: Per RetailWire, fuel surcharges from both carriers are currently running between 21% and 30%+ depending on service type, with multiple increases already implemented this year.
USPS: For the first time in its history, the Postal Service enacted an 8% fuel surcharge on packages. It went into effect April 26 and is locked in until at least January 2027. As CNN Business reported, that fee “will provide a necessary bridge to a permanent mechanism to reflect market conditions.” Spoiler alert: it’s probably not going away.
Maersk: The global shipping giant, which handles roughly 14% of the world’s shipping containers, added an emergency bunker surcharge tied to fuel availability disruptions in the Middle East, citing the near-closure of the Strait of Hormuz.
The Decision Every Retailer is Facing
For large-format retailers, Costco, Lowe’s, ShopRite, PetSmart, AutoZone and others operating at scale, the math gets complicated fast.
Passing costs to consumers carries real risk. Inflation sensitivity is at a high, and shoppers have options. A price increase that protects margin today can erode traffic tomorrow. Absorbing the costs internally protects the customer relationship but squeezes teams that are already being asked to do more with less.
What neither option does is solve the underlying problem: a revenue gap that didn’t exist six months ago and shows no sign of closing on its own.
A Revenue Stream You’re Not Using Yet
Old City Media works with large-format retailers to generate incremental revenue from foot traffic that’s already walking through the door.
Through our Leads at Retail program, we place brands like Renewal by Andersen, LeafFilter, and Power Home Remodeling inside your stores, where their representatives engage your customers directly at the point of visit, generating qualified leads for the brands and incremental revenue for you. There’s no added headcount, no operational lift, and no changes to your core merchandising or store experience.
We also purchase gift cards from our retail partners in bulk, putting immediate dollars back into the business before a single activation takes place. It’s a straightforward way to convert a partnership agreement into real cash.
What you end up with is a new revenue line that did not require a price increase, a budget reallocation, or a single change to how your stores operate. And while everyone else is waiting for fuel prices to come back down, you are not waiting on anything.
Let’s Talk
If you’re navigating the fuel surcharge situation and looking for ways to offset the impact without raising prices or gutting margin, we’d welcome the conversation. Reach out to Ray Sheehan at ray@oldcitymedia.com or call 267-939-0503 to discuss partnering with Old City Media.
Sources: Retail Dive, RetailWire, CNN Business, Digital Commerce 360, Spectrum News